AB-2145 – California Senate Committee guts energy consumer protections

On June 24,  the California Senate Energy Committee rejected a section of AB-2145 that guarantees energy consumer protections from local government agencies that try to draft residents willy-nilly into some community power scheme without their consent. Imagine getting a letter from your City Council stating it has decided to set up a community power scheme that allows them to sign you up without permission.

The thinking behind the Community Choice Act of 2002 (AB-117) was to allow for not-for-profit community-based clean energy programs to aggregate users in a jurisdiction to buy purportedly greener and cheaper power from the same power generators that sell energy to protected monopolies like PG&E who just mark up the cost and deliver the power to consumers.

It all sounds grand; carve out the middle man, use PG&E’s delivery system, reduce carbon emissions, create more green, create more unionized gubbermint subsidized jobs with golden pensions, save the planet, blah, blah, blah.

Unfortunately, the only way these schemes seem to work is if they use the power of government to shanghai all residents in the jurisdiction into the program without express permission.

ab-2145 protects energy consumers in CaliforniaAB-2145 energy consumer protections against being signed up automatically by your new local energy bureaucracy was shot down by the ill-informed, idle hands in the California Senate has caused cheers of triumph from the watermelon energy activists who swear that government running your electricity service will be the greatest thing since Obamacare. Eerily, Obamacare also relies on mandating all residents participate. So do the schools, Social Security. As well as the ham-fisted tactics of government sponsored labor monopolies like teachers unions. The hell you have to pay to opt out is more than daunting.

See the trend? Why do all these failing institutions require government coercion?

According to supporters anxious to have government insure enrollment, over a dozen such programs are in the works and poised to compete with the utilities by offering greener and lower priced electricity to customers. Two counties, Marin and Sonoma, are already doing so. Community Choice is underway or under exploration in San Francisco, San Diego, Monterey, Santa Barbara, San Luis Obispo, and in Alameda and Santa Cruz Counties, among other local jurisdictions.

But If these ideas are so great why do these people rely on the government forcing people to participate instead of letting them choose to opt-in?

Don’t get me wrong, I love having the ability to choose the energy provider of my choice with the best rates.

And you know what? I did.

My new gas supplier is IGS Energy. PG&E remains the billing agency and delivery system. By the end of 3 years my rates may be as much as 30% less than what PG&E customers will be paying due to all the upgrades in the “pipeline.” (sorry). Many energy consumers in California have the ability to make the same choice. I was not coerced, I did not have to have a local government sponsored committee of self-important poohbahs and wild-eyed tree huggers looking for a sweet subsidized gig as an energy czar march on my house and force me to sign up for cheaper rates.

So if consumers can make this choice already, why do we need proto-maoist busybodies yapping at us and signing us up without permission except to create a sinecure for themselves and cronies?

The Community Energy crowd could not believe the audacity of AB-2145 author Steven Bradford (D-Inglewood AD-62). Not only do they smear him as a former PR energy industry flack but are apoplectic that

Bradford’s bill ( AB-2145 ) would have turned the enrollment process on its head, and forced all customers to proactively sign up on their own, one at a time, with no ability to be joined together with other customers at the program start. Because this “opt in” requirement would have made group start-up financing impossible, it would have halted the launch of any further Community Choice programs in the state.

Excuse me?

I ask again, if it’s so great why do these statists who insist on forcing us to be free have to use government force for what is just as likely to become yet another failing subsidized government operation like the post office but in every single county in California.

That the California Senate struck down AB-2145 energy consumer protections from automatic signups in favor of these grasping people is insane. But hey…it’s California, where insanity seems to rule and there are mega kilowatts of it.

Bradford wrote this op-ed to defend AB-2145

Years ago, phone companies had a nasty habit of switching a subscriber’s service to another carrier without their knowledge. A person could check their mailbox and find out they had been switched from one phone carrier to another, without ever being informed before the switch was made.

This practice, known as “slamming,” is deceitful and deceptive. It is also illegal under both state and federal law. But while phone companies can no longer slam customers, one particular type of electric utility can still switch customers without their knowledge.

Most people in California subscribe to a utility like Southern California Edison. SCE buys power from energy producers — natural gas power plants, solar collectors, wind farms, etc. — and delivers that power to your home on the infrastructure it built and maintains.

A little over a decade ago the Legislature gave communities a way to buy their own power directly from producers, and only rely on the utility for the transmission portion of that process.

This is known as community choice aggregation (CCA), and make no mistake, I support it. CCAs give communities greater control over who and where their power comes from. We even explored it when I was a member of the Gardena City Council.

However, CCAs have the legal ability to automatically enroll everyone in their jurisdiction into the CCA without their prior consent — essentially the same as the phone company slamming that is now illegal.

The CCA is required to send notices to each customer informing them that they have been automatically enrolled in the program and giving them the ability to opt out of it.

But most people ignore the notices because they don’t know what a CCA is. Most of my colleagues didn’t even know what a CCA is until this issue came up.

That is why I wrote Assembly Bill  AB-2145, to end automatic enrollment and give customers the choice of who their energy provider is.

Unfortunately, a lot of misinformation and empty claims are floating around about what this bill does and why I wrote it.

This bill does not end CCAs. Communities can still form a CCA, but they would have to earn their customers, instead of acquiring them automatically.

This bill does not end renewable energy in California. CCAs would still be able to purchase as much renewable power as they want. Under another state law (which I supported), one-third of all power in California must be from renewable sources by 2020. But if a community wants 100 percent renewable power right now, CCAs give them that choice.

What’s more, last year I authored AB 217, which extends a subsidy program to help low-income families pay for solar panel installations. I joined the governor at a press conference last May in Long Beach to celebrate that achievement. Anyone saying I am against renewable power is wrong.

AB-2145 also requires CCAs to give customers more information up front. This includes comparisons of the CCA’s rates with those of the local utility, so customers can decide which option is best for them and their families.

And AB-2145 would also require disclosure of the actual sources of energy that a CCA is proposing. Right now, a CCA can claim to be “green” by purchasing carbon credits that offset the dirtier, fossil fuel power customers are actually getting.

Some CCA supporters complain that they cannot compete against investor-owned utilities, which enjoy a monopoly. The reality is investor-owned utilities are constituted by statute through the Legislature, which bestows upon them an obligation to serve. CCAs have no such obligation; they are free to turn you away.

I hope this information clears up some of the misunderstandings about my bill, AB-2145.

Again, it’s about true community choice, not community force.

I believe CCAs are a good thing, and if customers think so too, they will opt in.

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Comments

  1. Eric Brooks says

    Tell me then.. Do customers similarly get a choice when they get automatically enrolled in PG&E, SDG&E, or SCE’s monopoly? As I recall, I didn’t get any notices at all to ask me if I wanted my electricity from a monopoly corporation…

    • Eric Brooks says

      Nonsense. Only large commercial customers have the opportunity to ‘opt out’ of the monopoly utilities and use their large commercial budgets to buy from ‘alternative’ direct access providers. All residential and small business customers are automatically enrolled in the monopoly utilities with absolutely no choice in the matter whatsoever.

    • says

      You are misinformed. There is quite the commercial market for energy that, like the telcos, allows other providers using the same infrastructure. You just need to shop. IGS knocked on my door, I did the research, and signed up. My rate could be 30% less than PG&E rate per unit three years from now for gas.

  2. Eric Brooks says

    Tell me then.. Do customers similarly get a choice when they get automatically enrolled in PG&E, SDG&E, or SCE’s monopoly?

  3. Kyoko Takayama says

    “In practice many if not most customers will never see the “unless” message or not know what action to take.” You know the problem is right there. Reverse the situation. People may never bother to take time to do the math you did, or to take action to opt in. Also critical mass of consumers are needed for CCA to establish competitive pricing. As a consumer I would like to have a choice.

    • says

      Exactly. In effect, when a CCA says it needs to co-opt residents without permission so they can compete and then turns around and uses the power of government to capture all residents in its jurisdiction without actually competing for them is insidious. We already have that and we call them public utilities. And we already have choices like IGS Energy and others to choose other providers. Creating CCAs is just another bureaucratic nightmare of good intentions to serve the politically connected and loudest.

  4. Eric Brooks says

    The problem with your article Bill is that its fundamental assumption is simply wrong.

    Here’s how the ‘opt out’ actually works..

    Twice and months before a Community Choice program starts, all customers are sent notices that they will be included -unless- they opt out.

    So each customer has the free and clear choice -before- being enrolled, to either stay with the utility (at no cost or hassle whatever) or stay in the Community Choice program.

    It is an absolutely equal and fair, free market choice.

    And I assuming you believe in the consumer having more than one choice in a free market…

    • says

      In practice many if not most customers will never see the “unless” message or not know what action to take. The presumption of a government agency to automatically (and with force of law) include residents and then make them opt-out says a lot about who the plan is really serving. That is not consumer choice when government decides for you, but intimidation and poohbah overreach.

    • Eric Brooks says

      Let’s assume for the sake of argument that you are correct.

      Can you explain how it is a problem for customers to unwittingly be enrolled in a program that gives them cleaner energy at lower prices?

    • says

      Reefer is a good Dutch name. My spouse and I took the hyphenated name to honor both families. That you smear people with hate instead of argue the merits suggests you are the one that cannot be taken seriously.